EXHIBIT 10.4


                      AMERICAN MEDICAL SECURITY GROUP, INC.
                                CHANGE OF CONTROL
                             SEVERANCE BENEFIT PLAN


                            I. ESTABLISHMENT OF PLAN

     American Medical  Security Group,  Inc. (the "Company")  acknowledges  that
certain  executives'  contributions to the past and future growth and success of
the Company  have been and will  continue to be  substantial.  The Company  also
recognizes  that there exists a possibility of a "Change of Control" (as defined
in Section 3.3,  hereof) of the Company.  The Company also  recognizes  that the
possibility  of such a Change of Control may  contribute to  uncertainty  on the
part of executive  management  and may result in the departure or distraction of
executive management from their operating responsibilities.

     Outstanding  management of the Company is always essential to advancing the
best interests of the Company and its shareholders.  In the event of a threat or
occurrence  of a bid to acquire or change  control of the  Company or any of its
key affiliates or to effect a business combination, it is particularly important
that the  Company's  business be  continued  with a minimum of  disruption.  The
Company  believes  that the  objective  of securing  and  retaining  outstanding
management  will be achieved if the Company's or its  affiliates' key management
employees  are  given  assurances  of  employment  security  so they will not be
distracted by personal uncertainties and risks created by such circumstances.

     Therefore,  the Board of  Directors  of the  Company  has  established  the
American Medical Security Group,  Inc. Change of Control  Severance Benefit Plan
(the  "Plan") to pay  severance  benefits to certain  Executives  (as defined in
Section 3.1,  hereof) of the Company or its affiliates who separate from service
under specified  conditions while the Plan is in effect. This Plan is solely for
the benefit of those  individuals who are determined,  pursuant to the terms and
conditions  of this  Plan,  to be  Executives  of the  Company.  The Plan is not
intended,  nor  should it be  construed,  as  providing  benefits  for any other
individual,  including,  but not  limited to, any  employees  or officers of any
affiliates or subsidiaries of the Company.

                                II. TERM OF PLAN

     This Plan is effective as of the close of business  September 25, 1998, and
replaces in its entirety any previous change of control  severance benefit plans
of the Company and will continue in effect until modified,  amended, changed, or
terminated, as provided in Article VII hereof.

                             III. PLAN PARTICIPATION

     3.1 PARTICIPATING EXECUTIVES.  All employees of the Company who are members
of the Company's executive  management team as appointed by the President of the
Company from time to time (hereinafter collectively and individually referred to
as  "Executives")  are  hereby  designated  as  participants  in the  Plan.  The
President of the Company shall be considered an Executive and participate in the
Plan for all purposes except Sections 4.1 and 4.2 hereof.

     3.2  EMPLOYMENT  PERIOD.  If an Executive is employed by the Company on the
"Control  Change Date" (as defined in Section  3.3,  below),  the Company  shall
continue to employ such Executive and such Executive may continue as an employee
of the  Company  for the  Employment  Period.  For  purposes  of this Plan,  the
Employment Period begins on the Control Change Date and ends on the two (2) year
anniversary of the Control Change Date.

     3.3  CHANGE OF  CONTROL.  A  "Change  of  Control"  shall be deemed to have
occurred if, after the effective  date of the Plan:  (i) a majority of Directors
of the Company cease to continue to serve as Directors of the Company and/or the
Chief Executive Officer of the Company ceases to serve as the Chief Executive of
the  Company as the direct or  indirect  result  of, or in  connection  with the
occurrence  of:  (a) any  person,  including  a "group"  as  defined  in Section
13(d)(3)  of  the  Securities  Exchange  Act  of  1934,  becoming,  directly  or
indirectly,  the  beneficial  owner of securities  of the Company,  or any other
subsidiary,  representing  forty  percent  (40%) or more of the combined  voting
power of the then outstanding securities of the Company that may be cast for the
election of Directors  of the Company  (other than as a result of an issuance of
securities  initiated  by the Company or open market  purchases  approved by the
Board of Directors  of the Company as long as the  majority of the  Directors at
the time of such  approval  are also  Directors  at the time the  purchases  are
made);  (b) a cash  tender or  exchange  offer;  (c) a merger or other  business
combination;  (d) a sale of substantial  assets of the Company;  (e) a contested
election of directors;  or (f) any combination of the aforementioned  events; or
(ii) the  shareholders  approve  a plan of  liquidation  or  dissolution  of the
Company.

     3.4 CONTROL CHANGE DATE. The "Control  Change Date" means the date on which
an event  described  in Section  3.3  occurs.  If a Change of Control  occurs on
account of a series of  transactions,  the  Control  Change  Date is the date of
occurrence of the last of such transactions.

     3.5 PLAN BENEFITS ON QUALIFYING SEPARATION.  An Executive shall be entitled
to receive Plan Benefits  according to the terms of this Plan if an  Executive's
employment with the Company  terminates  because of a Qualifying  Separation (i)
during the six (6) month period immediately prior to the Control Change Date, or
(ii) during the Employment Period.

                        IV. PLAN BENEFITS AND LIMITATIONS

     4.1 PLAN BENEFITS.  "Plan  Benefits"  means benefits due to an Executive as
described in this Section 4.1 as follows:  (i) Executives who are Executive Vice
Presidents or Senior Vice Presidents ("Senior  Executives") shall be entitled to
an amount equal to three (3) times such Senior  Executive's  Base Period Income,
and (ii)  Executives  who are NOT  Executive  Vice  Presidents  or  Senior  Vice
Presidents ("Other  Executives") shall be entitled to an amount equal to one and
one-half (1.5) times the Other  Executive's  Base Period  Income.  Plan Benefits
shall be paid in a single sum  payment in cash.  Plan  Benefits  payments to the
Executive shall commence on the later of the thirtieth (30th) business day after
the Qualifying  Separation (as defined in Section 5.1 below) or the first day of
the month  following  his or her  Qualifying  Separation.  Plan  Benefits may be
subject  to  Section  4.4,  below.  In the event  the  Executive  qualifies  for
severance benefits under any other agreement with the Company, any Plan Benefits
payable  to the  Executive  hereunder  shall be  reduced  by any  benefits  paid
pursuant to the other agreement.

     4.2 BASE PERIOD  INCOME.  An  Executive's  "Base Period Income" shall be an
amount equal to the sum of (i) the average of the Executive's annual base salary
for the shorter of (a) the last two (2) most recent  annual pay periods,  or (b)
during the term of the  Executive's  employment  with the  Company or any of its
affiliates;  and (ii) the average of the  Executive's  annual  performance-based
bonus or bonuses  received  from the  Company or any of its  affiliates  for the
shorter of (y) the last two (2) most recent  annual pay  periods,  or (z) during
the  term  of  the  Executive's  employment  with  the  Company  or  any  of its
affiliates.

     4.3 INSURANCE COVERAGE. In addition to the Plan Benefits, the Company shall
pay an  Executive's  cost of  health,  dental,  long-term  disability,  and life
insurance coverage substantially  equivalent to coverage in place at the time of
the Qualifying  Separation for a period of three (3) years immediately following
the Qualifying Separation with respect to a Senior Executive and for a period of
one and one-half (1.5) years  immediately  following the  Qualifying  Separation
with  respect to an Other  Executive.  Thereafter,  the Company  will provide an
Executive with an explanation of any right to continue such coverage under COBRA
and any other applicable state or federal law.

     4.4 ATTORNEY'S  FEES. In the event that an Executive  incurs any attorneys'
fees in protecting or enforcing his or her rights in the Plan, the Company shall
reimburse the Executive for such  reasonable  attorneys'  fees and for any other
reasonable  expenses related thereto.  Such  reimbursement  shall be made within
thirty (30) days following final resolution of the dispute or occurrence  giving
rise to such fees and expenses.

     4.5 EXCISE TAXES. If the excise tax imposed under the Internal Revenue Code
of 1986, as amended (the "Code") section 4999 on "excess parachute payments", as
defined in the Code section  280G, is incurred on account of (i) any amount paid
or payable to or for the  benefit of an  Executive  under this  Section as legal
fees and expenses,  or (ii) any payments or benefits which an Executive receives
or has the right to receive  from the Company  under this Plan or any other plan
or compensation  arrangement of the Company (the "Change of Control  Benefits"),
the Company must  indemnify the  Executive and hold him or her harmless  against
all claims, losses,  damages,  penalties,  expenses, and excise taxes. To effect
this  indemnification,  the Company must pay the Executive the Additional Amount
within  fifteen (15) days after the Executive  provides a copy of his or her tax
return in accordance  with  subsection (i) below.  For purposes of the Plan, the
Additional  Amount shall mean the amount  necessary  to  indemnify  and hold the
Executive harmless from (i) the excise tax imposed on an Executive under section
4999 of the Code with  respect to the Change of  Control  Benefits  and (ii) the
amount  required to satisfy (x) the additional  excise tax under section 4999 of
the Code, (y) the hospital  insurance tax under section 3111(b) of the Code, and
(z) the  federal,  state and local income taxes for which an Executive is liable
on account of the payment of the amount described in item (i) and the payment of
the excise,  hospital  insurance and income taxes in  accordance  with this item
(ii) (the sum of Section  4.5 (i) and (ii) being  hereunder  referred  to as the
"Additional Tax Liability").

          (a) For purposes of determining  the amount and timing of the payments
     of the Additional  Amount,  the Company and the Executive shall, as soon as
     practicable after the event or series of events has occurred giving rise to
     the  imposition  of the  excise  tax,  seek the advice of  independent  tax
     counsel and shall cooperate in establishing at least tentatively the amount
     of the  Executive's  excise tax liability for purposes of paying  estimated
     tax. The Executive shall  thereafter  furnish to the Company a copy of each
     tax return  which  reflects a  liability  for an excise tax  payment  under
     section 4999 of the Code with respect to the Change of Control  Benefits at
     least  twenty (20) days before the date on which such return is required to
     be filed  with the  Internal  Revenue  Service.  Except as  provided  under
     subsection (b), the liability reflected on such return shall be dispositive
     for purposes of calculating  the Additional  Amount unless,  within fifteen
     (15) days  after  such  notice  is  given,  the  Company  furnishes  to the
     Executive  an opinion  from the  Company's  independent  auditors  or a tax
     advisor selected by the Company's  independent  auditors  indicating that a
     different  Additional Amount is payable or to the effect that the matter is
     not free from doubt under applicable laws and regulations and the Executive
     may, in such  auditor's or  advisor's  opinion,  take a different  position
     without  risk of  penalty,  which  shall be set forth in the  opinion  with
     respect to the payment in question.  Such opinion shall be addressed to the
     Executive  and shall state that the  Executive is entitled to rely thereon.
     If the  Company  furnishes  such  opinion to the  Executive,  the  position
     reflected in such letter shall be  dispositive  for purposes of calculating
     the Additional Amount, except as provided under this subsection (a).

          (b)  If the  Executive's  Additional  Tax  Liability  is  subsequently
     determined to be less than the amount of the Additional  Amount paid to the
     Executive,  the  Executive  shall repay to the Company  that portion of the
     Additional Amount payment  attributable to such reduction (plus interest on
     the amount of such repayment at the rate provided in section  1274(b)(2)(B)
     of the Code). If the  Executive's  Additional Tax Liability is subsequently
     determined to be more than the amount of the Additional  Amount paid to the
     Executive,  the Company shall make an additional payment in respect of such
     excess,  as well as the amount of any  penalty or  interest  assessed  with
     respect  thereto  at the time that the  amount of such  excess,  penalty or
     interest is finally determined.

     4.6 MITIGATION.  An Executive shall not be required to mitigate  damages or
the amount of any payment provided for in the Plan by seeking or accepting other
employment  or  otherwise,  and  compensation  earned  from such  employment  or
otherwise shall not reduce the amounts otherwise payable in the Plan;  provided,
however,  that the  Company's  obligations  under Section 4.3 hereof shall cease
with respect to each  applicable  type of  insurance  coverage as of the date on
which the Executive obtains other coverage substantially  equivalent to coverage
in place at the time of the Qualifying Separation.

     4.7 TAXES.  To the extent  required by  applicable  law, the Company  shall
deduct and  withhold  all  necessary  Social  Security  taxes and all  necessary
federal and state  withholding  taxes and any other similar sums required by law
to be withheld from any payments made pursuant to the terms of the Plan.

                            V. QUALIFYING SEPARATION

     5.1 DEFINITION. For purposes of the Plan, a "Qualifying Separation" means:

          (a) an Executive's  employment is terminated by the Company within six
     (6) months  prior to a Change of Control  or during the  Employment  Period
     except for "Cause",  death or total  disability.  For purposes of the Plan,
     "Cause"  means:  (i) the willful and continued  failure by the Executive to
     substantially  perform  his or her  duties as  established  by the Board of
     Directors of the Company;  (ii) the material breach by the Executive of his
     or her  fiduciary  duties  or  loyalty  of  care  to the  Company;  (iii) a
     conviction of a felony which,  in the  reasonable  judgment of the Board of
     Directors of the Company,  is likely to have a material  adverse  effect on
     the  business  reputation  of  the  Executive  or  the  Company,  or  which
     substantially  impairs the Executive's ability to perform his or her duties
     for the Company; (iv) the use of alcohol or non-prescription  drugs in such
     a manner as to interfere  substantially with the Executive's duties for the
     Company; or (v) the willful,  flagrant deliberate and repeated  infractions
     of material  published policies and regulations of the Company of which the
     Executive  has actual  knowledge  (the "Cause  Exception").  If the Company
     desires to discharge the Executive  under the Cause  Exception set forth in
     subsection (v) above,  it shall give notice to the Executive as provided in
     Section 5.2 and the Executive  shall have thirty (30) days after notice has
     been given to him in which to cure the reason for the Company's exercise of
     the Cause Exception.  If the reason for the Company's exercise of the Cause
     Exception is timely cured by the Executive (as  determined by a majority of
     the members of the Board of Directors of the Company  following a hearing),
     the Company's notice shall become null and void; or

          (b) an Executive voluntarily terminates employment with "Good Reason".
     For  purposes of this Plan,  Good Reason means an  Executive's  resignation
     from the  Company's  employment  within six (6) months prior to a Change of
     Control or during the  Employment  Period on account of: (i) the failure of
     the Board of  Directors  of the Company to reelect the  Executive to his or
     her then current position in the Company,  and the Executive then elects to
     leave the Company's  employment within six (6) months after such failure to
     so reelect or reappoint the Executive;  (ii) a material modification by the
     Board  of   Directors  of  the  Company  of  the  duties,   functions   and
     responsibilities  of the  Executive  without his or her consent;  (iii) the
     failure  of  the  Company  to  permit  the   Executive  to  exercise   such
     responsibilities  as are consistent  with his or her position and of such a
     nature as are usually associated with such offices of a corporation engaged
     in substantially the same business as the Company;  (iv) the Company causes
     the Executive to relocate his or her employment  more than fifty (50) miles
     from Green Bay,  Wisconsin,  without the consent of the Executive;  (v) the
     Company shall fail to make a payment when due to the Executive; or (vi) the
     Company's  reduction of the  Executive's  total direct  compensation  (base
     salary,  incentive  bonus,  other  compensation  and  benefits)  below  the
     Executive's average total direct compensation for the three (3) most recent
     years with the Company or such shorter  period for which the  Executive has
     been an employee of the Company.

     5.2 NOTICE OF QUALIFYING  SEPARATION.  Qualifying Separation by the Company
under the Cause  Exception  shall be communicated by Notice of Termination to an
Executive.  Qualifying  Separation  by an  Executive  for Good  Reason  shall be
communicated by Notice of Termination to the Company.  For purposes of the Plan,
a "Notice  of  Termination"  means a written  notice  which  (i)  indicates  the
specific  termination  provision  in the Plan  relied  upon,  (ii) sets forth in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination  of an Executive's  employment  under the provision so indicated and
(iii) if the termination date specifies the effective date of termination, which
date may be the date of receipt of such notice.

                        VI. ENTITLEMENT TO PLAN BENEFITS

     Unless  there has been a Change of  Control,  an  Executive  shall  have no
vested right to benefits in the Plan.

                         VII. AMENDMENT AND TERMINATION

     The Plan may be modified,  amended,  changed,  or terminated  only upon the
approval of the Company's Board of Directors during a regular, annual or special
meeting;  provided,  however,  that  any  modification,   amendment,  change  or
termination  of the Plan  shall  not be  effective  for any  Executive  who is a
participant in the Plan on the date such amendment is adopted until one (1) year
after the date of adoption. Any modification,  amendment, change, or termination
of the Plan  shall be in  writing  and  signed by at least two  officers  of the
Company at the level of executive vice president and above.

               VIII. DECISIONS BY THE COMPANY: FACILITY OR PAYMENT

     Any powers  granted  hereunder to the Board of Directors of the Company may
be exercised by a committee,  appointed  by the Board,  and such  committee,  if
appointed,   shall  have  general  responsibility  for  the  administration  and
interpretation  of this Plan. If the Board or the  committee  shall find that an
Executive  to whom any amount is or was payable  hereunder is unable to care for
his or her affairs  because of illness or accident,  or has died, then the Board
or the committee, if it so elects, may direct that any payment due him or her or
his or her  estate  (unless  a prior  claim  therefore  has been  made by a duly
appointed legal  representative)  or any part thereof be paid or applied for the
benefit of such person or to or for the  benefit of his or her spouse,  children
or  other  dependents,  an  institution  maintaining  or  having  custody  of an
Executive,  any other  person  deemed by the Board or  committee  to be a proper
recipient  on  behalf  of an  Executive,  or any of  them,  in such  manner  and
proportion as the Board or committee may deem proper.  Any such payment shall be
in complete discharge of the liability of the Company therefor.

                        IX. SOURCE OF PAYMENTS: NO TRUST

     The obligations of the Company to make payments  hereunder shall constitute
a liability of the Company to the  Executive.  Such  payments  shall be from the
general  funds of the  Company,  and the Company to whom such  payments  are due
shall not be required to establish or maintain any special or separate  fund, or
otherwise  segregate assets to assure that such payments shall be made.  Neither
an  Executive  nor a  designated  beneficiary  of an  Executive  shall  have any
interest in any  particular  asset of the  Company by reason of its  obligations
hereunder.  Nothing  contained  in this Plan  shall  create or be  construed  as
creating a trust of any kind or any other  fiduciary  relationship  between  the
Company and an Executive or any other person.

                                X. MISCELLANEOUS

     10.1 All Executives  claiming any interest  hereunder shall perform any and
all acts and execute any and all documents and papers necessary or desirable for
carrying out the Plan or any of its provisions.  In addition,  the Company shall
perform any and all acts and execute any and all documents and papers  necessary
or desirable for carrying out the Plan or any of it's provisions.

     10.2 The Plan shall be construed and administered  according to the laws of
the State of Wisconsin  without  reference to  principles  of conflicts of laws,
except to the extent  preempted  by federal  law. If any  provision  of the Plan
shall be or become invalid, such fact shall not affect the validity of any other
provision  of the Plan.  This Plan  document  sets forth the entire terms of the
Plan. Abbreviated Plan summaries,  and other explanations of the Plan's benefits
and  operations,   including  any  and  all  prior  agreements,  to  the  extent
inconsistent hereunder are hereby superseded.

     10.3 Each Executive of the Company, including any Executive in the Plan, is
an at-will  employee of the Company,  and nothing in this Plan will be deemed to
give an Executive  the right to be retained in the employ of the Company,  or to
interfere  with the right of the Company to  discharge an Executive at any time,
nor will it be deemed to give the Company the right to require an  Executive  to
remain in its employ,  nor will it  interfere  with the right of an Executive to
terminate employment at any time.

     10.4 Any and all  references  in the Plan to any  provision of any statute,
law, regulation, ruling, or order shall be deemed to refer also to any successor
provision of any statute, law, regulation, ruling or order.

     10.5 The Company and its Boards of Directors,  officers and employees shall
be free from  liability,  joint or several,  for personal acts,  omissions,  and
conduct,  and for the acts, omissions and conduct of duly constituted agents, in
the administration of this Plan; provided,  however,  that any individual who is
held liable for the effects and  consequences  of personal  acts,  omissions  or
conduct  in the  administration  of the Plan  shall  be  indemnified  and  saved
harmless by the Company except to the extent that such effects and  consequences
resulted from willful misconduct.

     10.6 No  benefit  under the Plan  shall be  subject  to  alienation,  sale,
transfer, assignment, pledge, attachment,  garnishment, execution or encumbrance
of any kind, and any attempt to accomplish the same shall be void.

     10.7  The  Company  will not  consolidate  or  merge  into or with  another
corporation,  or  transfer  all or  substantially  all of its  assets to another
corporation (the "Successor Corporation") unless the Successor Corporation shall
assume  the Plan,  and upon such  assumption,  an  Executive  and the  Successor
Corporation  shall become  obligated to perform the terms and conditions of this
Plan.